Top 10 Car Manufacturers: Volkswagen Group

#1: Volkswagen Group

A brief history

Volkswagen means ‘people’s car’, and the company was originally established after Adolf Hitler expressed his desire to produce a car able to carry two adults and three children at 100km/h, which would be affordable for citizens of the Third Reich. Hitler approved Ferdinand Porsche’s design for the people’s car and a state-owned factory was built along with a town for factory workers – Stadt des KdF-Wagens, now known as Wolfsburg. Full-scale production was planned for 1939, but war intervened.

During the war the Volkswagen plant was used primarily for military production. In 1945 the town was bombed and captured by U.S. forces, and was handed over to the British as it fell within their occupied zone. By 1946 the factory was producing 1,000 cars a month, despite still being in disrepair, and British army officials ordered 20,000 vehicles. The factory was offered to representatives from the British, American and French Motor industries, including Ford in 1948, but famously all rejected it.

In 1948 Volkswagen reorganized as a trust under West German control and former Opel manager, Heinrich Nordhoff, was appointed General Director of the company – a post he held until 1968. Volkswagen introduced the Type 2 van, pickup and camper, and the Karmann Ghia sports car, and the type 1 (Beetle) became increasingly popular.

By 1955 Volkswagen had formed the Volkswagen Group of America to standardize sales and services in the USA, and production increased dramatically, reaching 1 million units. The car’s popularity continued to grow and by 1972 Volkswagen had sold over 15 million Type 1 vehicles, eclipsing the Ford Model T as the biggest selling car of all time.

During the 1960’s Volkswagen had purchased two companies, Auto Union (owner of the discontinued Audi brand) and NSU, and merged these two companies in 1969 to create the modern-day Audi.

By the early 1970’s Volkswagen was running into trouble as the Type 3 and Type 4 models introduced in the 60’s had failed to take on, and sales of the Beetle in Europe and North America were in serious decline. Audi’s influence was pivotal, and their expertise in front-wheel drive and water-cooled engines led to the new range of Volkswagens including the Scirroco, Polo, Golf, and Passat.

The Golf was introduced in 1974, and it became the company’s flagship model, taking over from the Beetle. In 1978 Volkswagen opened its first production plant in the U.S. in New Stanton, Pennsylvania to produce the Golf (labelled as the Rabbit) for the North American market.

The Volkswagen brand continued to grow and during the 1980’s the company bought Spanish car-maker SEAT, and followed it up with the acquisition of Czech manufacturer Skoda via a joint venture in 1991, before eventually completing a buyout in 2000. Its first joint venture into the Chinese market came in 1984 with the creation of Shanghai Volkswagen Automotive Co. Ltd, while a second joint venture came in 1991 with the establishment of FAW Volkswagen Automotive Company Ltd.

In 1998 Volkswagen acquired three luxury brands in Bugatti, Bentley and Lamborghini. While In 2003 the final Type 1 Beetle model was produced in Mexico, bringing to an end the longest production run of any modern vehicle, after sales of over 21 Million cars.

An attempted takeover by Porsche in 2009 failed because the car company fell short of acquiring the necessary 75% stake required, and in a turnaround of events the two firms agreed a merger in which Volkswagen acquired 49.9% of Porsche. In 2012 a deal was finally arranged for Volkswagen to buy the remaining 50.1%, and complete the acquisition.

Founded

1937

Headquarters

Wolfsburg, Germany

Revenue (2013)

$269 Billion

Pre-tax profit (2013)

$16.9 Billion

Employees worldwide

572,800

Vehicle sales (2013)

9.7 Million

CEO

Martin Winterkorn

CEO

Martin Winterkorn became Chairman of the board of management of Volkswagen AG on January 1st 2007. In addition he also holds the positions of Chairman of the supervisory board of Audi AG, Chairman of the board of management of the Volkswagen brand, and member of the board of management of Volkswagen AG responsible for the area ‘Group research and development’.

Winterkorn initially joined Audi AG in 1981 as an assistant to the member of the board for quality assurance. In 1993 he became head of ‘Group Quality Assurance’ at Volkswagen AG, and by 2000 was appointed Member of the board of management responsible for research and development. From 2002 until his appointment he was Chairman of the board of management for Audi AG, and in addition, assumed responsibility for Technical Development at Audi from 2003.

At the present time, Winterkorn is overseeing a progressive investment in the Chinese market, as Volkswagen recently announced it is to invest 2 billion euros to build two new vehicle production plants in China. This is part of a wider plan to invest up to 18 billion euros by 2018, to expand production and increase the number of models available on the market. In the statement released by Volkswagen, Winterkorn referred to the Chinese market as "Our largest and most important market".

Mission

The Volkswagen group strategy 2018 focuses on positioning the Volkswagen Group as a global economic and environmental leader amongst automobile manufacturers. The four goals within this strategy are: to become a world leader in customer satisfaction and quality; to increase unit sales to more than 10 million vehicles per year; to achieve a long-term return on sales before tax of at least 8%; and to become the most attractive employer in the automotive industry by 2018.

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